Social interactions are abnormal in many people with schizophrenia even during childhood before their illnesses are manifest and diagnosed. Limitations in social connectedness discomfort in social interactions poorly developed social skills, blunted and/or socially inappropriate emotion, and emotion- related disturbances of cognition are all features of schizophrenia once manifest and diagnosed. Despite the recognized importance of this complex of social, affective and cognitive disturbances, the associated neurobiological abnormalities have been little studied and are poorly understood. We have developed a new paradigm for studying regional brain activations with fMRI during simulated emotion-evoking social interactions. We created video tapes of actors talking directly to the subjects about happy or sad past personal experiences, and displaying the full range of facial, voice and body manifestations of the emotion. This multidimensional, dynamic and socially contextualized stimulation has greater real world validity than the sequential presentation of still photographs of people's faces typically used in brain imaging studies of social-emotional activation. By comparing brain activations in healthy subjects during these tapes to activations when the actors talked about emotionally-neutral experiences, we identified regional brain activations common to both socially generated emotions and activations specific to each emotion. We also created tapes in which actors pretended to use cocaine or prepare to gamble and asked the subjects to join them as they did. With these and the original tapes we identified brain activation abnormalities in cocaine addicts and pathological gamblers related to their primary pathological behaviors and to emotion-evoking social interactions. The studies proposed in this application would be the first to apply this method to the study of schizophrenia. In earlier work, we demonstrated that cognition and brain laterality were abnormally affected by negative emotion in people with schizophrenia. To investigate this further, we incorporated a working memory task within the video tapes of simulated emotion-evoking social interactions. In preliminary studies of healthy subjects we have demonstrated that happy emotion leads to enhanced cognition-related activation of basal ganglia-thalamocortical circuits. We also propose to use this new methodology to study the effects of socially generated emotion on cognition related brain activation in people with schizophrenia. We predict that positive emotion-evoking social interactions will not enhance cognition-related brain activity in people with schizophrenia as it does in healthy people. Many people with schizophrenia have problems with the expression and understanding of emotion essential in social interactions. These problems precede the diagnosis of illness, are present to some degree in family members, limit patient quality of life and even the ability to participate in treatments. In this project we will use new knowledge from social neuroscience research and newly developed brain imaging procedures to study brain aspects of the patient problems in social-emotional function.